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Combined Returns (Tax Years Beginning before January 1, 2009)

To File as a Member of a Combined Group: Two or more corporations, domestic or foreign, that participate in the filing of a consolidated return of income to the U.S. Government, may elect to file a combined return for the purpose of reporting their net income in Massachusetts. After the election to file a Massachusetts combined return is made, a combined return must be filed for each subsequent year, unless and until the members receive written approval from the Commissioner to file separate returns. This approval will be granted only for a valid business purpose other than for the reduction of tax.

Each member subject to the Massachusetts corporate excise must be included in the combined return.

A corporation is subject to the Massachusetts excise when any of the following conditions are met:

the corporation actually does business within the Commonwealth;

the corporation exercises or continues its charter within the Commonwealth;

the corporation owns or uses any part of its capital, plant or other property in the Commonwealth; or

the corporation owns and/or rents real or tangible personal property as a lessor in Massachusetts even without having a usual place of business here.

To Elect to Be a Member of a Combined Group: Each corporation makes the election to be a member of a combined group by filing Form 355C - Massachusetts Combined Corporation Excise Return. The election to be a member of a combined group is made by the responsible corporate officer when signing the return. The election must be made by the due date of the corporate excise return or by the extended due date, if applicable.

If, in any year after an election is properly made:

a corporation is improperly excluded from a group's combined return, the Commissioner will require the inclusion of the omitted corporation and will recalculate the excise of the group and the individual corporation accordingly.

a corporation is improperly included in a group's combined return, the Commissioner will require the exclusion of the corporation from the combined group and will recalculate the excise of the group and the individual corporation accordingly.

Filing requirements and responsibilities of the principal reporting corporation:

corporations in an affiliated group electing to file a combined return should file their returns together. If an extension of time is required for one or more of the corporations, the extensions should be filed for the entire combined group;

the affiliated group must designate a principal reporting corporation for Massachusetts tax purposes;

for processing reasons, the combined group is encouraged to use the same principal reporting corporation each year. In most cases this will be the parent corporation of the federal consolidated group. However, in cases where the parent does not have taxable nexus in Massachusetts, another affiliate or subsidiary should be designated as the principal reporting corporation;

each corporation must fill out Form 355C and complete schedules A,B,C or D, and any other pertinent schedules;

each combined group member must attach a copy of the principal reporting corporation's Schedule CG to the front of its return;

the principal reporting corporation must also complete for each member of the combined group Schedule E-CG, Schedule CG and, if applicable, Schedule F. If more space is needed for corporations in the combined group, attach an additional schedule.

The Principal Reporting Corporation Computes the Corporate Excise as Follows: Each corporation in the combined group apportions its income subject to apportionment separately and the taxable net income of each such corporation, as so determined, is then added together and constitutes the combined group's taxable net income. The income measure of the excise for the group is reported by the principal reporting corporation along with its non-income measure of the excise on its Form 355C.

Each affiliate or subsidiary corporation must each file its own Form 355C to report its non-income measure of the excise.